Section 7 defines the scope of supply under GST. It includes all forms of supply of goods or services for consideration, import of services, activities specified in Schedule I without consideration, and activities in Schedule II. Certain activities specified in Schedule III are excluded from supply. The government may specify if certain transactions are to be treated as supply of goods or services. Schedule I lists activities without consideration as supply. Schedule II specifies what constitutes supply of goods or services. Section 8 deals with composite and mixed supplies, treating them as supply of the principal or highest taxed goods or services.

1. Meaning & Scope of Supply
Levy & CollectionLevy & Collection
GST Session By:
CA Mukesh Sharma
At NIRC - Prashant Vihar

2. Sec 7. Scope of supply
Sec 7(1)
For the purposes of this Act, the expression “supply” includes––
(a) all forms of supply of goods or services or both such as sale, transfer,
barter, exchange, licence, rental, lease or disposal made or agreed to
be made for a consideration by a person in the course or
furtherance of business;
(b) import of services for a consideration whether or not in the course or
furtherance of business;
(c) the activities specified in Schedule I, made or agreed to be made
without a consideration; and
(d) the activities to be treated as supply of goods or supply of services
as referred to in Schedule II.

3. Sec 7(2)
Notwithstanding anything contained in sub-section (1),--
(a) activities or transactions specified in Schedule III;
(b) Such activities or transactions undertaken by the Central
Government, a State Government or any local authority in
which they are engaged as public authorities, as may be
notified by the Government on the recommendations of thenotified by the Government on the recommendations of the
Council, shall be treated neither as a supply of goods nor a
supply of services.
Sec 7(3)
Subject to the provisions of sub-sections (1) and (2), the Government
may, on the recommendations of the Council, specify, by notification,
the transactions that are to be treated as—
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.

4. Schedule I: Activities without Consideration
1. Permanent transfer or disposal of business assets where input tax
credit has been availed on such assets.
2. Supply of goods or services or both between related persons or
between distinct persons as specified in section 25, when made in
the course or furtherance of business.
Provided that gifts not exceeding fifty thousand rupees in value in a
financial year by an employer to an employee shall not be treated as
supply of goods or services or both.
3. Supply of goods—3. Supply of goods—
(a) by a principal to his agent where the agent undertakes to supply such
goods on behalf of the principal; or
(b) by an agent to his principal where the agent undertakes to receive
such goods on behalf of the principal.
4. Import of services by a taxable person from a related person or from
any of his other establishments outside India, in the course or
furtherance of business.

5. 1) Transfer
a) any transfer of the title in goods is a supply of goods;
b) any transfer of right in goods or of undivided share in goods
without the transfer of title thereof, is a supply of services;
c) any transfer of title in goods under an agreement which stipulates
that property in goods shall pass at a future date upon payment of
full consideration as agreed, is a supply of goods.
2) Land and Building
Schedule II: Supply of Goods or Service
a) any lease, tenancy, easement, licence to occupy land is a supply of
services;
b) any lease or letting out of the building including a commercial,
industrial or residential complex for business or commerce, either
wholly or partly, is a supply of services.
3) Treatment or process
Any treatment or process which is applied to another person's goods
is a supply of services.

6. 4) Transfer of business assets
a) where goods forming part of the assets of a business are
transferred or disposed of by or under the directions of the person
carrying on the business so as no longer to form part of those assets,
whether or not for a consideration, such transfer or disposal is a
supply of goods by the person;
b) where, by or under the direction of a person carrying on ab) where, by or under the direction of a person carrying on a
business, goods held or used for the purposes of the business are put
to any private use or are used, or made available to any person for
use, for any purpose other than a purpose of the business, whether or
not for a consideration, the usage or making available of such goods
is a supply of services;

7. c) where any person ceases to be a taxable person, any goods
forming part of the assets of any business carried on by him shall be
deemed to be supplied by him in the course or furtherance of his
business immediately before he ceases to be a taxable person,
unless—
i. the business is transferred as a going concern to another person; or
ii. the business is carried on by a personal representative who is
deemed to be a taxable person.deemed to be a taxable person.

8. 5) Supply of services
The following shall be treated as supply of service, namely:—
a) renting of immovable property;
b) construction of a complex, building, civil structure or a part
thereof, including a complex or building intended for sale to a buyer,
wholly or partly, except where the entire consideration has beenwholly or partly, except where the entire consideration has been
received after issuance of completion certificate, where required, by
the competent authority or after its first occupation, whichever is
earlier.
Explanation.—For the purposes of this clause:
(1) Meaning of Competent Authority…….
(2) Meaning of Construction……………………

9. 5) Supply of services…..Cont….
c) temporary transfer or permitting the use or enjoyment of any
intellectual property right;
d) development, design, programming, customisation, adaptation,
upgradation, enhancement, implementation of information
technology software;
e) agreeing to the obligation to refrain from an act, or to tolerate an
act or a situation, or to do an act;
and
f) transfer of the right to use any goods for any purpose (whether or
not for a specified period) for cash, deferred payment or other
valuable consideration.

10. 6) Composite supply
The following composite supplies shall be treated as a supply of
services, namely:—
a)works contract as defined in clause (119) of section 2; and
b)supply, by way of or as part of any service or in any other
manner whatsoever, of goods, being food or any other article for
human consumption or any drink (other than alcoholic liquor for
human consumption), where such supply or service is for cash,
deferred payment or other valuable consideration.deferred payment or other valuable consideration.
7) Supply of Goods
The following shall be treated as supply of goods, namely:—
Supply of goods by any unincorporated association or body of
persons to a member thereof for cash, deferred payment or other
valuable consideration.

11. 1) Services by an employee to the employer in the course of or in
relation to his employment.
2) Services by any court or Tribunal established under any law for the
time being in force.
3) (a) the functions performed by the Members of Parliament,
Members of State Legislature, Members of Panchayats,
Members of Municipalities and Members of other local
authorities;
Schedule-III: Neither Goods nor Service
authorities;
(b) the duties performed by any person who holds any post in
pursuance of the provisions of the Constitution in that
capacity; or
(c) the duties performed by any person as a Chairperson or a
Member or a Director in a body established by the Central
Government or a State Government or local authority and who
is not deemed as an employee before the commencement of this
clause.

12. 4) Services of funeral, burial, crematorium or mortuary including
transportation of the deceased.
5) Sale of land and, subject to clause (b) of paragraph 5 of
Schedule II, sale of building.
6) Actionable claims, other than lottery, betting and gambling.
Explanation.—For the purposes of paragraph 2, the term "court" includesExplanation.—For the purposes of paragraph 2, the term "court" includes
District Court, High Court and Supreme Court.

13. Sec 8 Composite or Mixed Supply
The tax liability on a composite or a mixed supply shall be
determined in the following manner, namely: —
(a) a composite supply comprising two or more supplies, one of
which is a principal supply, shall be treated as a supply of such
principal supply; and
(b) a mixed supply comprising two or more supplies shall be
treated as a supply of that particular supply which attracts the
(b) a mixed supply comprising two or more supplies shall be
treated as a supply of that particular supply which attracts the
highest rate of tax.
Principal Supply [Sec 2(90)]:
means the supply of goods or services which constitutes the predominant
element of a composite supply and to which any other supply forming part
of that composite supply is ancillary

14. “Composite Supply” [Sec 2(30)]:
means a supply made by a taxable person to a recipient consisting of
two or more taxable supplies of goods or services or both, or any
combination thereof, which are naturally bundled and supplied in
conjunction with each other in the ordinary course of business, one of
which is a principal supply;
Illustration: Where goods are packed and transported with insurance, the
supply of goods, packing materials, transport and insurance is a
composite supply and supply of goods is a principal supply.
“Mixed Supply” [Sec 2(74)]:
means two or more individual supplies of goods or services, or any
combination thereof, made in conjunction with each other by a
taxable person for a single price where such supply does not
constitute a composite supply;
Illustration: A supply of a package consisting of canned foods, sweets,
chocolates, cakes, dry fruits, aerated drinks and fruit juices when
supplied for a single 26

15. Levy and Collection of Tax:
Article 265 of the Constitution of India mandates that
no tax shall be levied or collected except by the authority of law.
The Charging Section is a must in any taxing statute for levy and collection
of tax.
Before imposing any tax, it must be shown that the transaction falls within
the ambit of the taxable event and that the person on whom the tax is so
imposed also gets covered within the scope and ambit of the chargingimposed also gets covered within the scope and ambit of the charging
Section by clear words used in the Section.
No one can be taxed by implication.
Section 9 is the charging provision of the CGST Act.
Section 5 is the charging provision of the IGST Act.
Section 8 is the charging provision of the Compensation Act.

16. Sec 9 Levy and Collection of Tax:
9. (1)
Subject to the provisions of sub-section (2), there shall be levied a tax
called the central goods and services tax on all intra-State supplies of
goods or services or both, except on the supply of alcoholic liquor for
human consumption,
on the value determined under section 15and at such rates, not
exceeding twenty per cent., as may be notified by the Government on the
recommendations of the Council and collected in such manner as may berecommendations of the Council and collected in such manner as may be
prescribed and shall be paid by the taxable person.
9(2)
The central tax on the supply of petroleum crude, high speed diesel, motor
spirit (commonly known as petrol), natural gas and aviation turbine fuel
shall be levied with effect from such date as may be notified by the
Government on the recommendations of the Council.

17. Sec 9 Levy and Collection of Tax:…..Cont….
9(3)
The Government may, on the recommendations of the Council, by
notification, specify categories of supply of goods or services or both, the
tax on which shall be paid on reverse charge basis by the recipient of such
goods or services or both and all the provisions of this Act shall apply to
such recipient as if he is the person liable for paying the tax in relation to
the supply of such goods or services or boththe supply of such goods or services or both
9(4)
The central tax in respect of the supply of taxable goods or services or both
by a supplier, who is not registered, to a registered person shall be paid by
such person on reverse charge basis as the recipient and all the provisions
of this Act shall apply to such recipient as if he is the person liable for
paying the tax in relation to the supply of such goods or services or both.

18. Sec 9 Levy and Collection of Tax:…..Cont….
9(5)
The Government may, on the recommendations of the Council, by notification,
Specify categories of services the tax on intra-State supplies of which shall be paid
by the electronic commerce operator if such services are supplied through it, and
all the provisions of this Act shall apply to such electronic commerce operator as if
he is the supplier liable for paying the tax in relation to the supply of such services:
Provided that where an electronic commerce operator does not have a physicalProvided that where an electronic commerce operator does not have a physical
presence in the taxable territory, any person representing such electronic
commerce operator for any purpose in the taxable territory shall be liable to pay
tax:
Provided further that where an electronic commerce operator does not have a
physical presence in the taxable territory and also, he does not have a
representative in the said territory, such electronic commerce operator shall
appoint a person in the taxable territory for the purpose of paying tax and such
person shall be liable to pay tax.

19. ca.mukeshsharma@yahoo.com
10/07/2017
CA Mukesh Sharma
Email: ca.mukeshsharma@yahoo.com
Mob: 9911204002